Sunday, October 13, 2013

Neither strategy nor structure is static; they are stable enough to execute and they are agile to the changes.

It is a truism to say that no strategy is valid for all
times. On the top of this, a global competitive environment tends to reduce the
time span. Strategy needs continuous fine tuning, periodic updating and even a new strategy if demanded; Whereas
business structures are more stable in organizations, still, the digital
technology breaks through the functional silos and cross-functional
collaboration becomes new normal. So, in such circumstances, is ‘structure
following strategy’ still valid?

Strategy vs. Structure: Strategy is
often set in the boardroom or senior level round table, in a few meetings over
a short period of time. Structure is set organically over time through a
million little decisions, most taken without sight of the bigger picture but
all infused with the culture of the company.

Strategy, Structure
and Business Performance: The correlation between strategy, structure and
performance can be figured out via asking a series of questions:

1) How much does the Strategy impact on Business
Performance?
2).How much does the Structure impact on Business Performance?
3).What is the cause and effect relationship between Strategy and Structure
that impact on Business Performance?

There is a key difference
between digital and industrial organizations: In industrial organizations,
the structure is rigid and hard to change. In an environment where change is
constantly happening, that handicaps the organization; In the emerging digital
organizations, the business leverage social/mobile/cloud/analytics technology
and tools in enforcing holistic thinking, cross-functional collaboration and
dynamic processes and case management.

Modern Information
Management soothes the key business processes and ensure the right information
being accessed by the right people at the right time and location, one of the
main sticking points is that business still tend to associate structure with
assets owned by the corporation, IT has made collaboration among supply chain
partners, distribution channel partners, and other external entities in the
value chain much more accessible, so the notion that "structure follows
strategy" might need to be updated

Change Management is
multi-dimensional –structure, behavioral process and cultural, etc. Strategies are longer-term, so change is
rarely dramatic, and if dramatic, certainly the structure must change to
accommodate. However, there are also occasions where a structure can be first
put in place, which will enable new strategies to be conceived. Such
changes are normally required in all three dimensions- structure, behavioral
processes and cultural.

For organizational
effectiveness, the right structure is necessary, but might not be sufficient by itself. Behavioral processes of
individual motivation, interpersonal relations, team work in divisional,
functional and geographical groups; inter-divisional and inter-functional
relations; and positive interface with environment are also necessary.

Business Agility
takes agile strategy & structure, and seamless execution as well.
Business agility is the organizational capability to adapt to the changes and
manage opportunities and risks accordingly. The ubiquity of information has provided
both growth opportunities and increasing RISKS to organizations. Therefore, it
takes systematic thinking and planning upon strategic fit, structural
capability, risk intelligence and executable business model.